Ophir’s Oil Eploration and Appraisal in Somaliland

In April 2003, Rova Energy Corporation Limited (Rova) entered into the Berbera Production Sharing Agreement (Berbera PSA) with the Government of Somaliland.  Rova was a special purpose company established to acquire and develop the Berbera PSA.  In return for providing early funding, Mvelaphanda was awarded an option to acquire 75% of the issued share capital of Rova. 

The remaining 25% was held by a private individual. Ophir acquired this option from Mvelaphanda in October 2004 and in March 2005 exercised its option to acquire 75% of Rova.  In February 2007, Ophir and the private individual agreed to exchange Ophir’s shareholding in Rova for a direct interest in the Berbera PSA.  This was subsequently ratified by the Government in March 2007 (with the transaction completing in May 2007). Ophir then became a direct participant in the Berbera PSA holding an interest of 75% and is the designated operator.  In 2008 Rova agreed to sell its 25% interest in the Berbera PSA to UAE based Ras Al Khaimah Gas Company (RAKgas).  Ophir and RAKgas currently participate in the Berbera PSA through a joint venture governed by a Joint Operating Agreement (JOA).

The Berbera PSA originally consisted of four sub-blocks that were designated as 35/36 (onshore) and M10/M10A (offshore).  In 2006, the Group elected to maintain the 35 (onshore) and M10A (offshore) sub-blocks and relinquish 36 and M10.

Only three wells have been drilled in the original Berbera Block, two of which were located offshore in block M10, where they encountered minor oil shows.  The third well, the only onshore well in the block, was a 243m deep stratigraphic well.  Three wells, drilled adjacent to the western edge of block 35 (Dagah Shabel 1-2-3) over the period from November 1958 to November 1959, all encountered good oil shows.  The M10A/35 PSA, located in northern Somaliland, is predominantly onshore but also extends offshore into the Gulf of Aden. The block encompasses an area of 16,270km2 with a water depth of approximately 0 to 1,000m

Interest

The Group owns 75% of blocks M10A and 35 and is designated as the operator.

Exploration

The petroleum geology of Somaliland is contiguous with that of Yemen (a territory where there have been significant oil discoveries and production).  The Group acquired 2D seismic data offshore and completed an aeromagnetic survey over the onshore areas in Q1 2008.  The Group is currently in the 3rd exploration period which commenced on 1 December 2010.